nipoplansn hdfclifefilesdraft paperwithsebiforipo · hdfc holds 61.5 per cent in the life insurance...

NEW DELHI | 19 AUGUST 2017 FINANCE 3. <

ABHIJIT LELEMumbai, 18 August

HDFC Standard Life InsuranceCompany (HDFC Life) hasfiled a draft red herring

prospectuswith theSecuritiesExcha-ngeBoard of India (Sebi) for an InitialPublicOfferof 299.8millionshares.

Housing Development FinanceCorporation (HDFC) plans to offloadup to 191.2 million shares (9.57 percent stake)andStandardLife, its jointventure insurancecompany,will sellup to 108.6 million shares (5.43 percent stake) through the public offer,according to the prospectus.

HDFC holds 61.5 per cent in thelife insurance company. StandardLife, the UK-based foreign partner,holds 35 per cent.

Merchant bankers for HDFC LifeIPO’s include Morgan Stanley, HDFCBank,Credit SuisseandNomura.

According to the draft prospec-tus, the embedded value of HDFCLife was ~12,470 crore at the end of

March 2017, up from ~10,232 crore atthe end of March 2016. As on June30, its embeddedvaluewaspeggedat~13,220 crore.

It had a net worth of ~4,150 croreand a solvency ratio of 197.5 per centonJune30,2017,above theminimum150 per cent solvency ratio requiredunder the InsuranceRegulatory andDevelopment Authority of India(Irdai) rules.

After Irdai rejected the initialstructure of merger between HDFC

LifeandMaxLife, theboardofHDFCLife decided to go ahead with theirlisting plans as no other alternativestructure was in place. Moreover,Standard Life had expressed appre-hensionof anewstructure’s viabilityandstated its intent togo for a listingat the earliest opportunity.

ForthefinancialyearendedMarch31, 2017,HDFCLifepostedagrosspre-miumincomeof~19,445croreandtheprofit after tax stoodat ~892 crore anditsnetworth stoodat ~3,839crore.

HDFC Life files draftpaper with Sebi for IPO ABHIJIT LELE

Mumbai,18August

Andhra Pradesh Grameena VikasBank (APGVB), a regional rural banksponsored by State Bank of India, islooking to raise ~600-800 crore byissuing fresh equity shares throughan InitialPublicOffer (IPO).

V Narasa Reddy, chairman,APGVB, said the bank was comfort-able on the capital front,with a capital adequacyratio(CAR)of14percentbutit would need extra capitalto support growth plansover thenext fiveyears.

The lenderwould liketoexpandthebranchnetworkandassetbookaswellasmakeinvest-mentstoupgradetechnology.Besidesretainedearnings,itwouldneedinjec-tion of funds (equity) to financeexpansion and strengthen capitalbase.Theseplansare subject to regu-latoryclearances,Reddysaid.

The bank’s CAR strengthened toreach 14.05 per cent at the end ofMarch2017, from13.48percentayearago,wellabovethelevelofminimumnine per cent stipulated by the K CChakrabartycommittee.

SBI has indicated it plans to listtwo regional rural banks (RRBs)

sponsoredby it in thenext oneyear.Besides APGVB, SBI plans to listRajkot-based Saurashtra GraminBank.

TheRRBActwasamendedin2015,allowing these banks to raise capitalfrom sources other than the Centre,the state government and sponsorbanks. In such a case, the combinedshareholding of the central govern-mentandsponsorbankcannotbeless

than51per cent.NationalBankforAgric-

ultureandRuralDevelopm-ent,whichsupervisesRRBs,is yet to issue guidelines forraising capital from themarket. Reddy said thebank’s deposits grew 25.65

percent(from~2,616.46crore)toreach~12,818.58crore.Theshareoflow-costdeposits — current and savingsaccounts—increasedfrom36.60percentinMarch2016to41.04percentinMarch 2017. The cost of depositsdeclined from 7.62 per cent (March2016) to 6.89 per cent in March 2017.

Advances rose by 16.66 per cent(~1,766.76 crore) to reach ~12,368.53crore inMarch 2017. Out of it, creditto agriculture and allied activities,includingagriculture-portionofself-help group lending, stood at~8,403.85 crore.

APGrameenaVikasBankto raiseup to~800crore ANUP ROY

Mumbai,18August

ICICI Bank the country’slargest private sector lenderand, one of its public sectorpeer Union Bank of Indiareduced their savingsbank rates by 50 basispoints on Friday,expanding the num-berofbanks thathavecut their savings ratesin recent times.

State Bank of India (SBI)started the trend on July 31with a cut of 50 basis pointson savings deposits. Bank ofBaroda,PunjabNationalBank,HDFC Bank, Axis Bank, YES

Bank and now Union BankandICICIBankhavealsocuttomatch competition. But, thebaskets are different for dif-ferent banks.

For example, SBI reducedits savings rate to 3.5 per cent

fordepositsupto~1crore.For ICICIBank, the cutis effective fordeposits up to~50 lakh. Beyond~50 lakh, savings bank

remain at four per cent.IncaseofUnionBank, thecutinsavings ratewouldbeappli-cable for deposits up to~25 lakh. For deposits above~25 lakh, the rates continue toremain at four per cent.

ICICI,UnionBankcutsavingsrate

AVISHEK RAKSHIT &ISHITA AYAN DUTTKolkata,18August

The National Company LawTribunal (NCLT) has rejectedan appeal by Usha Martin’sousted chairman, PrashantJhawar (pictured), boardmemberBasantKJhawar, andother promoter shareholdersto stayaboardmeeting sched-uled for Saturday.

The meeting is aboutinfusing fresh capital into thecompany.

In a filing with the BombayStock Exchange, the companysaid the promoters, including

Usha Martin Ventures Ltd andPeterhouse Investments IndiaLtd, had moved the KolkataBenchoftheNCLTonThursday,seeking the appointment of a

special officer or administratorto supersede the current boardaswell asprevent the companyfrominfusing freshequity.

DebanjanMandal, partner,Fox & Mandal, the solicitorfirmrepresentingUshaMartin,said the NCLT had, on Friday,declined to stay the boardmeeting.

“After hearing the partiesat length, the Bench did notpass any order of stay on theboard meeting or any resolu-tion or agenda item proposedto be taken up at the boardmeeting scheduledonAugust19,” he said.

Thebenchhasdirected the

applicant and the respondentto maintain the status quo ontheir shareholding pattern inthe company.

The resolution to be pro-posed at the boardmeeting onSaturday will be over infusing~90 crore in the company byissuing convertible equity war-rantsandwillnotaltertheshare-holding pattern of the partiesconcernedandisonlyapropos-al to allot shares to thepromot-ers and promoter group entity.

It implies that PrashantJhawar,whocontinuestobeonthe board despite losing hischairmanship, and RajeevJhawar, thecompany’smanag-

ingdirector,will infuse~45croreeach into thecompany.

Incase theproposal for cap-italinfusionispassed,theshare-holders of the company willhavetoapprovetheresolutionatageneralmeeting.

“Theinfusionoffreshcapitalis in accordance with a prioragreementreachedbetweenthelendersandthepromoters.Theinfusionwillhelpinrepaymentof loans, besides other things,”RajeevJhawar said.

In the petition before theNCLT, the Basant-PrashantJhawar faction had allegedmismanagement at the com-pany by Rajeev Jhawar and

oppression of shareholders.Also, this factionof promotersin the company sought torestrain the current manage-ment fromsellingordisposingof immovable assets or prop-erty of the company.

They also alleged that theboard meeting convened onApril 25 this year, whenPrashant Jhawarwas removedas chairman, and BasantJhawar stripped of his powerson the board, was illegal. Thesame day, in the board meet-ing, GN Bajpai, former chair-man of the Securities andExchange Board of India, wasappointed chairman.

NCLTrejectsUshaMartinex-chief ’splea

N IPO PLANS N

SBI indicatedthat it plans tolist two RRBssponsored byit in the nextone year

PRESS TRUST OF INDIAMumbai, 18 August

The Reserve Bank (RBI) willsoon introduce new fluores-cent blue ~50 bank notesbearing the motif of ‘Hampiwith Chariot’ that depictsIndia’s cultural heritage.

RBI said it would shortlyissue these ~50denominationbanknotes in the MahatmaGandhi (new) series.

“The new denominationhas the motif of Hampi withChariot on the reverse,depicting the country’s cul-tural heritage. The basecolour of the note is fluores-cent blue,” RBI said in arelease.

Among others, the newnotes will have designs andgeometric patterns aligningwith the overall colourschemes, both at the obverseand reverse, RBI said.

On theobverse/front side,thenotewill haveaportrait ofMahatma Gandhi at the cen-tre, denominational value inDevanagari script, micro let-ters RBI, India — both inEnglish andDevanagari—as

well as the numeral ‘50’.The Ashoka pillar

emblem will be on the rightside of the obverse and anelectrotype watermark andthe number panel withnumerals in ascending orderon the top left side and bot-tom right side.

The new note havingdimensions of 66 mm by 135mm will bear the year ofprintingon the reverse side, aSwachhBharat logowith slo-gan, language panel and themotif of ‘HampiwithChariot’.

“All the banknotes in thedenomination of ~50 issuedby the Reserve Bank in theearlier series will continue tobe legal tender,” RBI added.

RBI to issue fluorescentblue ~50 banknotes

Embeddedvaluepeggedat~13,220croreinJune